Monday, 23-April-2007
Gold firmed slightly after Friday’s NY close, but spent a fairlyquiet Far East session. Tocom had a two dollar range with the upsidelimited to $693.30.
In Europe the yellow metal eased and dipped below the$690 support level several times before fixing at $691 on the first Londonfix, up 3.4 dollars from the previous AM. The market was very quiet in theabsence of any important economic data announcement with only Brentdrifting slightly higher after Nigeria’s presidential elections drewcondemnation from monitors and investors waited for fresh word on oilsupplies from the world’s eighth biggest exporter. Nigeria could providethe impetus for a move out of the $64.76-69.59 range within which crudetraded for the past four weeks due to the concerns of the violence cuttingdeeper into the output. Nigerian President Olusegun Obasahjo’s chosensuccessor was proclaimed victor today in the presidential poll. EuropeanUnion observers as well as local coalition of civil society said howeverthat the election could not be considered as credible, calling for thecancellation of the vote. This popular dissatisfaction with the electionsraises the possibility of sabotage directed at the oil industry. After theopening of the Comex division of the New York Mercantile Exchange theprecious metal rallied, but as well as in Asia got capped by profit takingjust above $693. Prices then once again slipped below $690, but this timedue to the follow through selling the low was extended to $687.20.Subsequently the yellow metal hovered in a tiny range below $690 and onlyan hour before the close managed to get above it on the news that IranianPresident Mahmoud Ahmadinejad said in an interview today that the countrywill not agree to a European Union proposal of a “double suspension” ofuranium enrichment and sanctions. He said: “Iran will not accept it becausethe sanctions are not legal, so you cannot ask a country to suspend itslegal activities in return for a suspension of an illegal move”. We believethat gold needs to break out of the $680-694 range within which itfluctuated since the beginning of last week in order to get a clearerdirection.
Silver also had a very subdued start of the week. In the Far East theprices could not get above $13.95 while fairly well supported below $13.90.During our time zone the white metal became slightly more active. Thedownside was gradually extended to hit $13.87 prior to the opening of theNY trading session. Subsequently prices recovered the losses, but failed tobreak above the $13.95 level until about an hour before the close. Spotrallied up to $14.09 and settled above the $14 psychological level. Webelieve that silver has the potential to trade higher, but for the momentdid not yet acquire enough momentum to break out of the $13.80-14.10 range.
MKS Gold & Silver, Daily Report
By Lidia Nazarova
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